Worchild v University of Queensland Law Society Inc
[2005] QDC 161
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- Unreported Judgment
- Worchild v University of Queensland Law Society Inc[2005] QDC 161
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Worchild v University of Queensland Law Society Inc[2005] QDC 161
Worchild v University of Queensland Law Society Inc[2005] QDC 161
DISTRICT COURT OF QUEENSLAND
CITATION: | Worchild v University of Queensland Law Society Inc & Anor [2005] QDC 161 |
PARTIES: | ANDREW WORCHILD Plaintiff v UNIVERSITY OF QUEENSLAND LAW SOCIETY INC First Defendant and CANDICE JACOBS Second Defendant |
FILE NO/S: | BD3799/2004 |
DIVISION: |
|
PROCEEDING: | Application |
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 10 June 2005 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 15 March 2005 |
JUDGE: | McGill DCJ |
ORDER: | Statement of claim filed 22 October 2004 struck out. Liberty to plaintiff to replead, in default action dismissed with costs. Order the plaintiff pay the defendants’ costs of their applications, to be assessed. Plaintiff’s application dismissed. Order the Plaintiff pay the defendants’ costs of that application to be assessed on an indemnity basis. |
CATCHWORDS: | FRAUD, MISREPRESENTATION AND UNDUE INFLUENCE – Fraud – elements – pleading – need to plead intention to cause damage suffered FRAUD, MISREPRESENTATION AND UNDUE INFLUENCE – Pleading –negligent misrepresentation – whether duty – damage alleged too remote NEGLIGENCE – Misrepresentation – pleading – whether duty – whether causation properly pleaded – remoteness of damage PRACTICE – Pleading – striking out – fraud – intention to cause damage – negligence – remoteness of damage. Balfour and Clark v Hollandia Ravensthorpe NL (1978) 18 SASR 240 – applied. Lake Koala Pty Ltd v Walker [1991] 2 Qd R 49 – applied. Overseas Tankships (UK) Ltd v Morts Dock & Engineering Co Ltd [1961] AC 3 – applied. Peek v Gurney (1873) LR 6 HL 377 – applied. Tackey v McBain [1912] AC 186 – applied. |
COUNSEL: | The plaintiff appeared in person P D T Applegarth SC and M Hodge for the first defendant Q Cregan for the second defendant |
SOLICITORS: | The plaintiff was not represented Emerson Black for the first defendant Brian Bartley & Associates solicitors for the second defendant. |
- [1]In this matter there are three applications. On 31 January 2005 the first defendant applied to have the claim and statement of claim struck out because the pleading disclosed no reasonable cause of action, had a tendency to prejudice or delay the fair trial of the proceeding, was unnecessary and scandalous, and was frivolous and vexatious. On 11 February 2005 the plaintiff filed an application seeking judgment under r 292, or in the alternative that the notice of intention to defend and defence of the first and second defendants be struck out under r 171, or under r 190 or under r 225, in the latter two cases with judgment for the plaintiff for damages to be assessed. On 22 February 2005 the second defendant applied for an order that the statement of claim be struck out under r 171, and that the proceeding be struck out. All applications came on for hearing before me.
Background facts
- [2]It appears that in 2003 the plaintiff purchased from the Queensland University of Technology Association of Law Students a card known as an “L Card” for about $10. Such cards were issued by that association, the first defendant, and the Associations of Law Students of Griffith University and of the Gold Coast campus of Griffith University. The second defendant was alleged to have been the president of the Gold Coast branch of the Griffith Law Students Association. The evidence indicates that, at least in the case of the first defendant, revenue from this is a significant part of the Society’s income. The intention is that various businesses say they will allow the holder of such a card certain concessions, principally in the form of reduced prices, and the existence of such concessions is made known in publicity in connection with the card. No doubt businesses are motivated to offer such concessions by the prospect that cardholders will as a consequence be induced to patronise their establishments. The existence of such concessions then stands as an incentive for students to purchase the card.
The pleading
- [3]The plaintiff alleged that he had such a card at all material times, and that the first and second defendants were issuers of the card. The plaintiff alleged that in pamphlets and information disseminated through L Card websites the defendants represented that: “(a) the plaintiff was entitled to discounts on drinks and free entry from the Drink Nightclub and the Sugar Shack; and (b) if a venue fails to honour a deal the issuers would resolve the problem upon receipt of notice of same.” The plaintiff also alleged that the then president of the first defendant had written to the plaintiff on or about 10 March 2003 representing that the L Card entitled the plaintiff to free entry to the Sugar Shack Nightclub on Saturday nights. The plaintiff further alleged that on or about 26 August and 28 September 2003 he received email letters from the then secretary of the first defendant by which he: “(a) gave an undertaking that [the defendants] would provide particulars of the contract with the Drink Nightclub and the Sugar Shack Nightclub; and (b) [the defendants] would provide assistance in relation to the foreshadowed legal proceedings.” It was further alleged that on or about 12 October 2003 there was a discussion between the plaintiff and the second defendant in the course of which the second defendant made various representations concerning the L Card, the Drink Nightclub and the Sugar Shack Nightclub. It is not necessary to set out in detail the content of those alleged representations, which were also alleged to have been made by her on behalf of the first defendant.
- [4]The plaintiff alleged that the various representations referred to were made fraudulently, or in the alternative amounted to misleading and deceptive conduct or conduct likely to mislead or deceive in contravention of s 52 of the Trade Practices Act or s 38 of the Fair Trading Act 1989 or both, on the part of the first defendant, and that the second defendant was knowingly concerned in that conduct within the meaning of s 75B of the Trade Practices Act, and that the representations were made negligently. It was further alleged by the plaintiff that as a result of the making of those representations and in reliance on them he commenced legal proceedings in the Federal Court against the Drink Nightclub and its director, as a consequence of which he suffered loss and damage in the sum of $60,000, in the form of legal costs ordered to be paid upon the failure of the proceedings in the Federal Court (in the sum of $24,000) and an amount of $36,000 for “work done and/or legal professional costs.”
- [5]The Federal Court proceeding was brought against the Drink Nightclub (Qld) Pty Ltd and a person associated with it, alleging breaches of the Trade Practices Act on the part of the first respondent, and that the second respondent was knowingly concerned in those contraventions. A claim was also made in negligence. The proceeding was dismissed under the Federal Court rules on the basis that it did not disclose any cause of action, was embarrassing in a pleading sense, and there existed no demonstrable basis upon which the applicant could make out on his own behalf any cause of action which had a prospect of succeeding at trial.[1] The plaintiff does not now dispute that that decision, which meant that his action was doomed from its commencement, was correct.
Claim in fraud
- [6]In order to plead a claim in fraud it is necessary for the plaintiff to plead that representations were made by or on behalf of the defendant, that the representations were false, that the defendant knew that the representations were false or was recklessly indifferent to whether they were true or false, that the defendant intended that the plaintiff act in a particular way in reliance on the representation, that the plaintiff did act in that way, and that as a direct result he has suffered loss or damage.[2]
Adequacy of the representations
- [7]In relation to the first element, the defendants submit that the allegations in paragraphs 11 and 12 necessarily cannot be made out, because the email letters relied on by the plaintiff do not support the representations pleaded. This is a reference to two emails from the then secretary of the first defendant, Mr Goss. The actual content of the email of 26 August 2003[3] was in the following terms: “This is just to acknowledge receipt of your email (below). We will endeavour to get back to you with the details you have requested as soon as possible. Just so you know, given that the L-Card is a cooperative effort between the Law Soc’s at UQ, QUT, GU and GU Gold Coast, with each organisation selling cards as the membership cards for their respective society, some of the details may be a bit hard to assess. That being said, we’ll see what we can do for you.”
- [8]The email of 28 September 2003[4] was in the following terms: “Thank you for your email. This is just to acknowledge recept. Our sponsorship people will endeavour to get back to you as soon as practicable. Please be aware that details may need to be obtained and/or clarified with other Law Societies; the UQLS is just one of the several societies that together cooperate to organise the L-Card (the others being QUOTALS, GULS and the Griffith GC Law Soc).”
- [9]In my opinion it is clear beyond argument that neither separately nor together did those emails provide any undertaking by Mr Goss on behalf of anybody to do anything.[5] The undertaking pleaded in paragraph 12(a) of the statement of claim necessarily cannot be made out. As to the second part of this paragraph, there was arguably in the emails a representation of a present intention to endeavour to obtain information and provide it to the plaintiff, but no express reference to any “foreshadowed legal proceedings.” However, the email of 26 August 2003 was sent in reply to an email from the plaintiff the previous day.[6] That after referring to a failure on the part of the nightclub to honour the L-Card, stated: “A letter of demand will be sent within the next two weeks and proceedings shortly thereafter. I trust that I can rely on your assistance in the conduct of proceedings. I request the following further and better particulars.” Details were then sought of the contract with the nightclubs. The email of 28 September 2003 was sent in reply to an email from the plaintiff dated 25 September 2003.[7] This was in the same terms as the email of 25 August. It is at least arguable that that could be sufficient to indicate that some legal proceedings were foreshadowed.
- [10]What was pleaded in paragraph 12(b) was that “the issuers would provide assistance in relation to the foreshadowed legal proceedings.” This was pleaded as a representation as to what would occur or what would be done in the future. That is not something which is capable of supporting an action for deceit. Where there is a representation that the representor will do something in the future, that is actionable in deceit only on the basis that it implies a representation of a present intention in the representor to do that thing in the future, and only if the plaintiff can prove that at the time when that representation was made the representor did not have that intention.[8] It is not sufficient merely to prove that there was a representation that something would be done in the future, and in due course that was not done. But in relation to paragraphs 11 and 12 of the statement of claim, that is all that has been pleaded.[9]
- [11]In my opinion therefore paragraphs 11 and 12 as they stand cannot support a cause of action for fraud. The same difficulty arises in relation to the representation in paragraph 8(b), that “if a venue fails to honour a deal the issuers would resolve the problem upon receipt of notice of same.” In respect of this it is pleaded only that the defendants could not or did not take any action to resolve the plaintiff’s complaints: para 17D.
The intention pleaded
- [12]It was further submitted that the pleading did not sufficiently allege that the representations were made with the intention that the plaintiff should act upon them in the relevant way, that is, by commencing proceedings in the Federal Court. The relevant part of the pleading is that in paragraph 16 of the statement of claim, which was in the following terms:
“The representations referred to in paragraphs 8 to 14 (inclusive) above were made by the defendants
- (a)in order to induce the plaintiff to pursue the Drink nightclub and the Sugar Shack nightclub for discounts on goods and free entry;
- (b)fraudulently as the defendants knew the representations were false and/or the defendants made the representations with reckless indifference to their truth or otherwise;
- (c)in circumstances where they knew or ought to have known that the plaintiff was relying upon the representations and their truth and accuracy in commencing legal proceedings against the Drink Nightclub and/or pursuing the Sugar Shack nightclub.”
- [13]Paragraph 16(b) is a sufficient allegation that the representations were known to be false by the defendants, or in the alternative were made with reckless indifference, and that on either basis they were therefore made fraudulently.[10] These are allegations of the particular states of mind which the plaintiff must prove the defendants had in order to succeed in an action for deceit. But it is not necessary to plead or particularise the evidence on which the plaintiff will rely in proof of the existence of this state of mind.
- [14]The plaintiff must prove that he acted on a representation in the manner intended by the representation.[11] Hence if a representation is made in order to induce someone to act on it in a particular way, and he subsequently acts on it in a different way, that is not actionable because the representation is spent.[12] Even if it could be said that the representations made in relation to the benefits that could be obtained from an L-Card were made with the intention of inducing a person to become a member of a society so as to obtain one, because they were not made with the intention of the representee commencing an action in the Federal Court the representation is not actionable in that respect. This is shown perhaps most clearly by the decision of the Privy Council in Tackey v McBain [1912] AC 186, where it was held that it was not sufficient for the plaintiff to show that the defendant had lied, but it was necessary to show that he acted with fraudulent intent, that is, to cause the defendant to act in the way in which he had acted.
- [15]In the present case, where the plaintiff alleged that in reliance on the representations he commenced legal proceedings in the Federal Court, it is therefore necessary for him to show that the defendants in making the representations were doing so with the intention to induce the plaintiff to act in that way. But all that has been alleged in paragraph 16(a) and (c) is that there was an intention to induce the plaintiff to pursue two nightclubs for discounts on goods and free entry, in circumstances where they knew or ought to have known that the plaintiff was relying upon the representations in commencing those legal proceedings, and pursuing the other nightclub. That in my opinion is not a sufficient pleading to satisfy this element of the cause of action for fraud. It follows therefore that in this respect the whole of the claim for fraud against both defendants is not made out on the pleading.
- [16]The requirement that the defendant intend that the plaintiff should act upon it as he in fact did is the only mechanism in relation to the action for deceit which controls the scope of the damages which will be suffered. The damages have to be directly caused by the fraudulent misrepresentation, but subject to that there is no requirement that they be reasonably foreseeable.[13] I think it also follows that if the necessary intention was present that the plaintiff rely on the representation, it does not matter that the plaintiff was acting unreasonably, as was submitted to have been the case here, in acting as he did by commencing the proceedings in the Federal Court.[14]
Breach of Trade Practices Act
- [17]The plaintiff next claimed damages for misleading and deceptive conduct contrary to s 52 of the Trade Practices Act against the first defendant, and that the second defendant was knowingly concerned in that misleading and deceptive conduct.
- [18]Section 52 contains a prohibition on certain conduct of a corporation in trade or commerce. Relevantly, the corporation must be a trading corporation. The statement of claim alleged that the first defendant was a corporation, but nowhere alleged that it was a trading corporation. Nor was it alleged that any of the representations relied on were made by the first defendant in trade or commerce. These are essential requirements for a proper pleading of a cause of action under the Trade Practices Act for damages for breach of s 52.
- [19]It necessarily follows that there was also no proper pleading of a claim against the second defendant under s 75B of the Trade Practices Act, because there was no proper pleading of a breach of s 52 in respect of which the second defendant could have been knowingly concerned. But in any event, it is well established that it is insufficient in order to plead a case against an individual under s 75B merely to plead the conclusion in terms of the words of the statute. It follows that no proper cause of action under the Trade Practices Act has been pleaded against the second defendant either.
Breach of the Fair Trading Act
- [20]In relation to the pleading against the defendants of an allegation of contravention of s 38 of the Fair Trading Act 1989, s 38 is the analogue of s 52, and although it is not confined to a corporation, and particularly a trading corporation, it is still directed to conduct engaged in in trade or commerce. It was not alleged that either defendant was engaged in trade or commerce in relation to any of the conduct relied on in the pleading. In addition, a cause of action is available under s 99 of the Act for a contravention of s 38 only if the loss or damage was suffered by a consumer: s 99(4)(a). The term “consumer” is defined in s 6 of the Act. There were no allegations in the current pleading of material facts which would show that the plaintiff was a consumer. It is by no means clear from the factual background that the plaintiff was in fact a consumer in a way which is relevant to the cause of action alleged, but in circumstances where there was no proper pleading of any such allegation it is impossible to ascertain whether that is so. It follows that there has also not been any proper pleading of any claim for damages under the Fair Trading Act 1989.
Claim in negligence
- [21]It was also alleged that there was liability in negligence, on the basis that the defendants owed the plaintiff a duty to take reasonable care when making representations to him, which had been breached. The duty was alleged to have arisen because the plaintiff had purchased an L-Card and the defendants were issuers of the L-Card, and because of the allegations in paragraphs 15 and 16 of the statement of claim. I have already quoted paragraph 16, paragraph 15 alleges that the plaintiff commenced legal proceedings in the Federal Court reasonably relying upon certain representations referred to in the pleading. It is immediately apparent that there is some deficiency in the pleading; paragraphs 15 and 16 do not allege facts which are relevant to the existence of a duty. The only facts relied on as giving rise to a duty were that the first and second defendants issued L-Cards, and that the plaintiff had purchased an L-Card from somebody; the pleading does not allege specifically that it was purchased from either of the defendants, and as I understand the true factual position from the material before me, it was in fact purchased from someone else.
- [22]The basis of the allegations of a duty must therefore depend simply on the fact that the defendants were issuers of the L-Card, and that it was therefore reasonable for the plaintiff as a holder of the L-Card to rely on their advice as to its operation and effect.
- [23]The recognition of a duty to take reasonable care in relation to the giving of advice occurred in the decision of the House of Lords in Hedley Byrne v Heller [1964] AC 463, in a case where a bank gave a reference in relation to a customer. Obviously the bank has in such circumstances special knowledge about the financial position of the customer, so that it was reasonable for the recipient to rely on that reference. The duty was at one time confined to a person whose business or profession it was to provide information or advice of a kind calling for special skill or competence, or who had held himself out as possessing such special skill or competence: Mutual Life and Citizens Assurance Co Ltd v Evatt [1971] AC 793[15]. Subsequently the High Court adopted a broader approach in Shaddock & Assoc. Pty Ltd v Parramatta City Council (1981) 150 CLR 225, but still in a context where the defendant had special access to information.[16] Later in San Sebastian Pty Ltd v The Minister (1986) 162 CLR 340, in the joint judgment of the majority at p.357, reference was made to a situation where a person “though volunteering information or advice, may be known to possess, or profess to possess, skill and competence in the area which is the subject of the communication.”[17]
- [24]In the same case Brennan J said at p. 372 that the representor would come under a duty of care if three conditions were satisfied: “First … if the representor realises or ought to realise that the representee will trust in his especial competence to give that information or advice; second … if it would be reasonable for the representee to accept and rely on that information or advice; and third … if it is reasonably foreseeable that the representee is likely to suffer loss should the information turn out to be incorrect or the advice turn out to be unsound.” That passage was cited by Dawson J in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241, where his Honour also said, at p. 257: “A person who gives information or advice to another intending to induce the other to a course of action does not necessarily undertake to be careful in the information he gives or the advice he offers. The occasion for the advice or information may be of a purely social nature inconsistent with the assumption of any responsibility.”
- [25]In the same case, which was concerned with an action for negligence against an auditor which ultimately failed in the High Court, Toohey and Gaudron JJ said at p. 265: “The decided cases do not identify precisely what it is that results in liability for economic loss suffered in consequence of the voluntary provision of information or advice. However, common sense requires the conclusion that a special relationship of proximity marked either by reliance or by the assumption of responsibility does not arise unless the person providing the information or advice has some special expertise or knowledge, or some special means of acquiring information which is not available to the recipient. Moreover, ordinary principles require that the relationship does not arise unless it is reasonable for the recipient to act on that information or advice without further enquiry. Similarly, ordinary principles require that it be reasonable for the recipient to act upon it for the purpose for which it is used. That is not to say that a special relationship of proximity exists if these conditions are satisfied. Rather, it is to say that the relationship does not arise unless they are.”
- [26]In circumstances where the boundaries of the duty to take reasonable care when giving advice are not precisely defined, I should be cautious about striking out a pleading simply on the basis that the facts alleged do not give rise to a duty. It seems to me that all of the requirements identified by Brennan J in San Sebastian, and identified by Toohey and Gaudron JJ in Esanda Finance Corporation, were arguably satisfied in the present case. Although I acknowledge that the latter passage does not mean that those requirements necessarily establish a duty, they certainly must go some way towards doing so. In all the circumstances I am not satisfied that the pleading, insofar as it alleged that a duty of care arose in these circumstances, is sufficiently inadequate to satisfy the General Steel test, although paragraph 23, insofar as it relies on paragraphs 15 and 16, is defective so that part of that allegation should be struck out.
- [27]The next issue in relation to an action for negligence is the question of causation. There are two aspects to that. The first is whether the making of the representations, assuming that they were made in breach of a duty to take reasonable care, in fact caused the plaintiff to suffer the loss. Since the loss relied on was suffered because the plaintiff commenced the proceeding in the Federal Court, for practical purposes the issue is whether the making of the misrepresentations in fact caused the plaintiff to commence that proceeding.
- [28]The question of whether causation is established in such circumstances largely depends on whether, if the representations had not been made, the plaintiff would not have commenced the proceeding in the Federal Court.[18] The ultimate question is whether the defendants’ wrongful act or omission is, as between the plaintiff and the defendants and as a matter of common sense and experience, properly to be seen as having caused the relevant loss or damage.[19] However, it is not necessarily absolutely any loss which was caused in fact by the defendants’ conduct for which recovery is allowed; there is also the question of remoteness for the loss, which depends on whether the loss was one which was reasonably foreseeable.[20]
- [29]There are limits to the requirement of reasonable foreseeability, and it is one which is of no real significance in relation to personal injury, but it is still of some importance in relation to an action such as the present involving only economic loss. In the case of economic loss, in my opinion it is necessary for the particular way in which the economic loss came to be suffered to have been reasonably foreseeable; in the present case, for it to have been reasonably foreseeable that the plaintiff would incur economic loss by commencing a court proceeding against the nightclub and its director. I do not think it is sufficient simply to say that the plaintiff might suffer economic loss in some other form, for example by incurring costs in travelling to a particular nightclub in the expectation that he would be allowed free entry, which was not forthcoming.
- [30]Once one gets to that point, in my opinion it was clearly not reasonably foreseeable that the plaintiff would respond to the representations, assuming they were made and assuming they involved a breach of duty, by commencing proceedings in the Federal Court against the nightclub and its director. Plainly the plaintiff had no cause of action against them, and the commencement of inappropriate proceedings of that nature was not a reasonably foreseeable consequence of any misinformation as to the scope of operation of the L-Card. Indeed in my opinion it was a wholly unreasonable response on the part of the plaintiff. In my opinion any loss or damages suffered by the plaintiff as a result of his having taken that action should be seen as too remote from any breach of duty on the part of the defendants, so that there can be no liability to them in negligence. I am satisfied that that is sufficiently clear for the General Steel test to be satisfied. That is the only form of loss relied on in the action, so it follows that the statement of claim, so far as it is a claim for negligence, must be struck out.
- [31]This conclusion makes it unnecessary to consider further the defendants’ submissions in relation to the question of causation. There are difficulties with causation as well, although the issues in relation to causation in fact are different depending on the particular representations relied on. Insofar as was represented that the plaintiff had certain entitlements, in respect of, relevantly, the Drink Nightclub (para 8(a)) a strict “but for” test of causation would appear to be satisfied in relation to the commencement of the Federal Court proceeding, although causation may well be excluded by the modified “but for” test adopted by the High Court. That however is an issue which I would be reluctant to decide on a strike out application.
- [32]It is more difficult to see how the making of the representation in paragraph 8(b), that any failure to honour the deal would be resolved by the issuers, induced the plaintiff to commence the Federal Court proceeding; this was rather a representation that it would not be necessary for the plaintiff to do anything himself if there was a problem. The representation in paragraph 10(a) is in the same category as that in paragraph 8(a). For reasons given earlier, it is not necessary to consider the representation in paragraph 12(a).
- [33]As to the representation in paragraph 12(b), the plaintiff’s case appears to be that he commenced the proceedings in the expectation that some assistance from the defendants would be forthcoming in those proceedings, but such assistance was not forthcoming and as a result the proceedings were unsuccessful. That is the sort of factual situation which may well be capable of satisfying the test of causation, but an argument of that nature would depend on the question of why the Federal Court proceeding failed. That depends entirely on the reasons given by the Federal Court, and it is apparent from those reasons that there was no assistance which the defendants could have provided the plaintiff which would have given him a good cause of action against either defendant. On that basis, the defendants say the misrepresentation was not causative of the plaintiff’s loss. The plaintiff’s loss arose simply because he did not have a good cause of action against the respondent in the Federal Court proceeding.
- [34]That may well be true, but I am not sure it is a complete answer to the allegation of causation. If representations (negligent, or for that matter fraudulent) as to assistance in relation to foreshadowed proceedings in fact lead the representee to commence proceedings which are doomed, it is not clear why the financial loss suffered by the representee as a result of commencing the doomed proceedings was not caused by the making of the representations. That would certainly seem to be the case if the representee can show that but for the making of those representations he would not have commenced the proceeding, but it may not be necessary for him to go that far; it may be sufficient to show that the making of the representations was a cause of his commencing the doomed proceeding. The question of causation does not depend in my opinion on why the plaintiff’s Federal Court proceeding failed, but rather on why the plaintiff commenced that proceeding. The case pleaded is that the plaintiff was induced to commence the (doomed) Federal Court proceeding by the making of the representations, and I am not persuaded that that case is not adequately pleaded.
- [35]The representations alleged in paragraph 14 of the statement of claim are different again. To some extent these are representations as to various things having passed between the second defendant’s society and the operators of the nightclubs. There were then representations that there was certain wrongful conduct on the part of the nightclubs, that the defendants were not in a position to enforce the contract with them, and that the plaintiff had a particular entitlement to benefits from the nightclubs. Again, it seems to me that the crucial question is whether the making of these representations in fact induced the plaintiff to commence the doomed proceeding.
- [36]These are not the sort of representations which would naturally lead a person to act in such a way. Where representations are made which are the sort of thing which would naturally tend to induce persons to take a particular course of action, such as enter into a contract, courts will readily enough find, sometimes by way of presumption, that there was in fact such an inducement, that is, that causation has been shown.[21] But it seems to me that in principle it is open to the plaintiff to seek to prove that in fact he did commence this proceeding as a result of the making of those representations. If the plaintiff could persuade a tribunal of fact to make that finding of fact, that would be sufficient to satisfy the requirement of causation.
- [37]I accept that it is necessary to plead the material facts necessary to establish the causal relationship between the contravention and the loss.[22] What needs to be done in order to achieve this in a particular case would depend on the facts of the case, and the particular factual proposition in relation to causation on which the plaintiff is relying. I doubt whether I would be prepared to find that the defendants had satisfied the General Steel test in relation to the, admittedly fairly limited, factual basis of causation which was pleaded in the statement of claim as it stands.
- [38]It is also unnecessary for me to consider further the arguments by the defendants in relation to the various allegations of agency in the pleading. Certainly at first sight some of the allegations of agency appear fanciful. I am not at all sure that that is a sufficient basis for striking out an allegation in a pleading that a person was acting as agent for a party. But in circumstances where the whole of the statement of claim has been struck out anyway, these issues can I think be left to one side.
Abuse of process
- [39]There was a further basis upon which it was alleged that the proceeding should be struck out: that it was an abuse of the process of the court. It was submitted on behalf of the defendants that the proceeding had been commenced for a collateral purpose, namely to secure the production to the plaintiff of a copy of a written contract between the nightclub in question and somebody in relation to the proposed concessions which had been the subject of the Federal Court action. The basis for this allegation was that the plaintiff sent to the solicitors for the second defendant on 26 November 2004 an email[23] which enclosed some further and better particulars, explained that he had been ill and would provide further material, and continued: “Your client has failed and refused to provide a copy of the purported contract and refused to provide a deposition. Similar requests were made by Hynes Lawyers. I request a copy of the contract and correspondence between your client and the Drink Nightclub Sugar Shack. All your client has to do is produce a copy of the contract and these proceedings will be stayed.” That email was sent after the claim and statement of claim had been filed on 22 October 2004, and after the proceeding in the Federal Court had been dismissed, which occurred on 24 May 2004. It is not entirely clear therefore what relevance obtaining a copy of any contract could have to the plaintiff, apart from in relation to the current proceeding.
- [40]The plaintiff’s position in relation to the current proceeding is explained in other emails which he has sent, including a further email to the solicitors for the second defendant on 11 January 2005.[24] He referred there to representations being made on a website until the end of March 2004 as to the benefits to which a holder of an L-Card was entitled, presumably from the relevant nightclubs. He continued: “Your client cannot proffer something which it does not have. Your client does not have any arrangement or contract with either of the two venues.” There was also an email from the plaintiff to a representative of the first defendant dated 26 February 2005.[25] That also complained about the absence of any contract. The point appears to be that statements made about the nightclubs on the first defendant’s website were unjustified, in the absence of any such contract.
- [41]In all the circumstances I am not persuaded that the plaintiff in bringing this proceeding is motivated by some collateral purpose, namely to obtain a copy of some contract to use other than for the purposes of this proceeding. I think that in substance what he was saying on 26 November was rather that he would abandon the proceeding if the second defendant could produce a copy of a contract with the nightclub involved in the Federal Court case (which he does not believe exists). I am not persuaded that the proceeding has been commenced for a collateral purpose, and is therefore an abuse of the process of the court.
Conclusion
- [42]In all the circumstances therefore the plaintiff’s statement of claim should be struck out. The question arises whether there should be liberty to replead, or whether the action should also be struck out. It is a very serious step to strike out a pleading without giving liberty to replead. It was submitted on behalf of the defendants that the deficiencies in the pleading have been pointed out to the plaintiff some time ago, but the plaintiff made no attempt to file an amended pleading. Nevertheless, this is the first occasion on which a pleading has been struck out by the court in this action. It does seem clear on the present material that the plaintiff cannot plead a cause of action in negligence against the defendants. The pleading of the statutory causes of action is so defective that it is not possible to tell at the present time whether a proper cause of action can be pleaded.
- [43]In relation to the action for fraud, both the defendants have filed affidavits denying that what was said by either of them to the plaintiff was said knowing that it was false, or with reckless indifference to whether it was true or false. There is no affidavit evidence of the plaintiff which demonstrates, or indeed which suggests, to the contrary. Nevertheless, I do not consider that it is appropriate to resolve finally a strike out application in relation to an action for fraud simply on the basis of affidavit evidence that there was no fraud. Nor is affidavit evidence from the defendants as to the sense in which what was said was to be understood conclusive for the purposes of a strike out application, even if that is a crucial issue for a trial.[26] The defendants are not applying for judgment under r 293, and on an application to strike out the pleading what matters is not the true facts but what facts have been pleaded. In all the circumstances therefore I am not prepared to deny the plaintiff liberty to replead. Nevertheless, there should be a time limit for doing so, and the action should stand dismissed if an amended statement of claim is not filed within that time.
- [44]The plaintiff’s application has really been overtaken by the outcome of the defendants’ applications. In circumstances where there is no proper pleading of a cause of action by the plaintiff, there can be no question of giving judgment for the plaintiff under r 292. In circumstances where almost certainly the defendants would want to replead in response to any amended statement of claim which was filed, there is no point in considering striking out the existing defences under r 171. The application under r 190 appears to be based on the proposition that the denials or non-admissions in the defences were inadequate, and therefore there were deemed admissions, but in circumstances where the statement of claim is struck out there is nothing to which the defendants are deemed to have admitted, so there can be no judgment under r 190. Rule 225, which was also relied upon, is concerned with a failure to make disclosure. In circumstances where there is no proper statement of claim, there is necessarily no obligation on the defendants to make disclosure, so there cannot be any proper foundation for an order under r 225(2)(b). The plaintiff’s application must therefore be dismissed.
- [45]In view of this, and where the first defendant had already filed and served an application seeking the striking out of the plaintiff’s statement of claim, in my opinion the application by the plaintiff filed 11 February 2005 was entirely inappropriate, and misconceived. There is also the consideration that, although it purports to seek judgment for the plaintiff under r 292, it is supported by no evidence whatever of fraud by either defendant. Although the plaintiff is a litigant in person, he describes himself as a solicitor; it is not clear whether he is actually in practice. I think that the court is entitled to expect better than this of a solicitor.
- [46]I appreciate that orders for costs on the indemnity basis ought not readily be made.[27] Nevertheless, I think that the combination of circumstances applicable in relation to the plaintiff’s application justifies an order for costs on that basis. Accordingly the plaintiff’s application is dismissed and I order the plaintiff to pay the first and second defendants’ costs of and incidental to that application to be assessed on the indemnity basis. In respect to the other applications however the costs will be assessed on the standard basis.
Footnotes
[1] Worchild v The Drink Nightclub (Qld) Pty Ltd [2004] FCA 642.
[2] See Fleming, “The Law of Torts”, (9th Ed 1998) chapter 28; Bullen Leake & Jacob’s “Precedents of Pleadings”, (15th Ed 2004) p. 799.
[3] Affidavit of plaintiff filed 11 February 2005 Exhibit C.
[4] Affidavit of Goss filed 23 February 2005 Exhibit 5.
[5] Whether this was so depends on an objective test: Krakowski v Eurolynx Pty Ltd (1995) 183 CLR 563 at 576.
[6] Affidavit of Goss filed 23 February 2005 Exhibit 1.
[7] Affidavit of the plaintiff filed 11 September 2005, part of Exhibit C; it is also exhibited to Goss’ affidavit.
[8] Fleming p. 697; Balfour and Clark v Hollandia Ravensthorpe NL (1978) 18 SASR 240 at 252, 257; Lake Koala Pty Ltd v Walker [1991] 2 Qd R 49 at 55..
[9] In statement of claim para 17E.
[10] Millhouse IAG Pty Ltd v Environautics Pty Ltd [2000] QDC 196.
[11] Spencer Bower Turner and Handley “Actionable Misrepresentation” (4th Ed 2000) p.104 para [102]; Fleming p.700; Peek v Gurney (1873) LR 6 HL 377 at 411-12; Tackey v McBain [1912] AC 186.
[12] Spencer Bower Turner and Handley pp. 117-9, para [118].
[13] Fleming p.703; Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 at [65].
[14] Contributory negligence is not a defence: Standard Chartered Bank v Pakistan National Shipping Corp’n (Nos 2 and 4) [2003] 1 AC 959. See also Sykes v Reserve Bank of Australia [1999] ATPR #41-699.
[15] Also (1970) 122 CLR 628.
[16] See Gibbs CJ at p.233; Stephen J at p. 240; Murphy J at p. 256. That was a case where the defendant, although not exercising special skill had particular access to the relevant information.
[17] In Woolcock Street Investments Pty Ltd v CDE Pty Ltd (2004) 78 ALJR 628 the joint judgment of the majority at [24] said that this case and Evatt can be seen as cases in which the contention that the defendant knew that the plaintiff would rely on the accuracy of the information the defendant provided was a central plank in the plaintiff’s allegation that the defendant owed a duty of care.
[18] March v Stramare (1991) 171 CLR 506.
[19] Medlin v State Government Insurance Commission (1995) 182 CLR 1.
[20] Overseas Tankships (UK) Ltd v Morts Dock & Engineering Co Ltd [1961] AC 388.
[21] Gould v Vaggelas (1985) 157 CLR 215 at 238-9.
[22] Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 at 222.
[23] Part of Exhibit F to the affidavit of the plaintiff filed 11 February 2005.
[24] Part of Exhibit D to the affidavit of the plaintiff filed 11 February 2005.
[25] Part of Exhibit E to the affidavit of McCormack sworn 28 February 2005 and filed by leave.
[26] Krakowski (supra) at 578.
[27] Di Carlo v Dubois [2002] QCA 225.